New powers for charities

Posted on 19th June 2023 by Solutions Accountancy

From 14 June 2023, the latest set of changes mandated by the Charities Acts 2022 came into force.

Changes now in place include simplified legal requirements that charities must comply with before selling, transferring or leasing land, and new statutory powers to enable:

Charities to spend, in certain circumstances, a proportion or all of their permanent endowment fund where the market value of the fund is (£25,000 or less) without Commission authorisation.
Charities to borrow, in certain circumstances, up to 25% of the value of their permanent endowment fund without Commission authorisation.
Charities that have opted into a total return approach to investment to use permanent endowment to make social investments with a negative or uncertain financial return, provided any losses are offset by other gains.
The Commission to direct a charity to stop using a working name if it is too similar to another charity’s name or is offensive or misleading.
The Commission to delay registration of a charity with an unsuitable name or delay entry of a new unsuitable name onto the Register of Charities. Working with the principal regulator, the Commission can also use these naming powers on exempt charities.

The Director of Legal & Accounting Services at the Charity Commission said:

“The latest changes introduced by the Charities Act 2022 give the charities we regulate more flexibility and greater powers. These are positive changes that will impact a significant number of charities, so it is important all organisations, big or small, take the time to check what this means for them. This is especially important if they are looking, for example, to dispose of land. We have updated our guidance to help trustees understand the changes, and our contact centre is open to those who need further support.”

Gift Aid small donations scheme

Posted on 15th June 2023 by Solutions Accountancy

The Gift Aid Small Donations Scheme (GASDS) allows qualifying charities and Community Amateur Sports Clubs (CASCs) to claim a top-up equivalent to Gift Aid on small donations of money made without a Gift Aid declaration. A small donation is defined as a donation of £30 or less made in cash or using contactless technology, such as a contactless credit or debit card. Donations made by other methods of payment such as cheque or bank transfer do not count.

The maximum annual amount of small donations that can be claimed through the GASDS is the lower of £8,000 or 10 times the amount the charity receives in Gift Aid donations – known as the matching rule. The £8,000 limit allows charities and CASCs to claim Gift Aid style top-up payments of up to £2,000 a year.

Usually, to claim gift aid the donor must have paid Income Tax or Capital Gains Tax at least equal to the amount the charity wants to claim and must complete a gift aid declaration. However, under the GASDS charities can claim tax relief on cash donations of £30 or less without a gift aid declaration or even knowing the identity of the donor.

Check when to expect reply from HMRC

Posted on 15th June 2023 by Solutions Accountancy

HMRC has a useful online tool to help agents and taxpayers know when they can expect to receive a reply from HMRC regarding a query or request that they have made. The online tool is updated weekly.

The online tool has recently been extended to include information about employers’ PAYE and National Insurance.

The full list of taxes the tool can be used for are as follows:

Child Benefit
Corporation Tax
Employers’ PAYE
Income Tax
National Insurance
Self-Assessment
Tax credits
VAT

Agents can also check how long it will take HMRC to:

register you as an agent to use HMRC online services;
process an application for authority to act on behalf of a client; and
amend your agent details.

The online tool can be accessed at the following address, and you do not have to be logged in to receive an answer: https://www.tax.service.gov.uk/guidance/Check-when-you-can-expect-a-reply-from-HMRC/start/are-you-an-agent

Passport delays and applications

Posted on 15th June 2023 by Solutions Accountancy

A recent investigation by the House of Commons Committee of Public Accounts, in connection with the UK passport office, has found that hundreds of thousands of applicants faced unacceptable delays in receiving their passports.

Following the removal of COVID-19 travel restrictions, His Majesty’s Passport Office (HMPO) received a record number of passport applications. HMPO had anticipated this surge in applications, however, whilst staff processed a record number of applications, many people were let down.

The consequences of these delays included being unable to travel for family emergencies, losing money spent on holidays and having difficulties proving their identities. Another surge in demand is predicted for this year, meaning that now might be a good time to check if your passport needs to be renewed.

It is currently taking up to 10 weeks for passports to be issued. It takes longer for postal applications to be processed than online applications. There are also premium services available at an additional cost.

The current fees for a new passport are as follows:

Type of passport	Apply online	Apply by paper form
Adult (16 and over) standard 34-page	£82.50	£93
Adult (16 and over) 50-page frequent traveller	£93.50	£104
Child (under 16) standard 34-page	£53.50	£64
Child (under 16) 50-page frequent traveller	£64.50	£75
For people born on or before 2 September 1929	Free	Free

Tax exempt private medical costs

Posted on 15th June 2023 by Solutions Accountancy

There is no requirement for employers to pay tax and National Insurance on certain health benefits covered by tax concessions or exemptions. For example, there is no requirement to report employees’ medical or dental treatment or insurance if they are a part of a salary sacrifice arrangement.

In addition, the following health benefits can be provided tax free:

A maximum of one health-screening assessment and one medical check-up in any year.
Eye tests required by health and safety legislation for employees who use a computer monitor or other type of screen.
Glasses or contact lenses required by employees for working on computer monitors or other types of screen.
Medical treatment for employees working overseas. The employer must have committed in advance to pay for this treatment or must pay the provider directly for the employee’s treatment or insurance.
Medical treatment or insurance related to injuries or diseases that result from your employee’s work.
Medical treatment to help an employee return to work. This allows the employer to pay up to £500 in costs for an employee to return to work.
Any medical or dental treatment or insurance provided that is not exempt must be reported to HMRC. Employers may be required to deduct and pay tax and National Insurance on these amounts.

Effects of settlement legislation

Posted on 15th June 2023 by Solutions Accountancy

The settlement legislation is intended to prevent an individual from gaining a tax advantage by diverting his or her income to another person who is liable at a lower rate of tax or is not liable to Income Tax.

Where a settlor has retained an interest in a property in a settlement the income arising is treated as the settlor’s income for all tax purposes. A settlor can be said to have retained an interest if the property or income may be applied for the benefit of the settlor, a spouse or civil partner.

In general, the anti-avoidance settlements legislation can apply where an individual enters into an arrangement to divert income to someone else and in the process, tax is saved.

These arrangements must be:

bounteous, or
not commercial, or
not at arm’s length, or
in the case of a gift between spouses or civil partners, wholly or substantially a right to income.

However, there are a number of everyday scenarios where the settlements legislation does not apply. In fact, after much case law in this area, HMRC has confirmed that if there is no 'bounty' or if the gift to a spouse or civil partner is an outright gift which is not wholly, or substantially, a right to income, then the legislation will not apply.

New life sciences growth package announced

Posted on 15th June 2023 by Solutions Accountancy

The Chancellor, Jeremy Hunt, has announced a new £650 million package of measures to help boost UK life sciences.

The new ‘Life Sci for Growth’ package brings together 10 different policies including £121 million to improve commercial clinical trials to bring new medicines to patients faster, up to £48 million of new money for scientific innovation to prepare for any future health emergencies, £154 million to increase the capacity of the UK’s biological data bank – further aiding scientific discoveries that help human health – and up to £250 million to incentivise pension schemes to invest in our most promising science and tech firms.

The package also includes plans to relaunch the Academic Health Science Network as Health Innovation Networks as well as changes to planning rules to free-up lab space and updating a route for East West Rail to improve connections between the UK science powerhouses of Oxford and Cambridge.

Launching the package, the Chancellor said:

‘Our Life Sciences sector employs over 280,000 people, makes £94 billion for the UK each year and produced the world’s first covid vaccine.

These are businesses that are growing our economy while having much wider benefits for our health – and this multi-million pound investment will help them go even further.’

Complexity may be double-edged sword

Posted on 12th June 2023 by Solutions Accountancy

There does seem to be a trend to replace human interactions with automated AI systems. This is especially evident in the management of our tax system.

There was a time, many years ago, when each taxpayer’s tax affairs would be managed by a local tax inspector and all records were kept in paper format in a physically located paper-based filing system.

Now, all tax records are kept electronically. Unless your affairs are being formally investigated by HMRC – in which case a tax person may be making decisions – the only human interaction will be with a call centre operative, and it is unlikely that they will ever have seen your data prior to your call.

It is a small step from a call with a human being, to a desktop exchange with an AI system.

HMRC staff will consist of specialists who pursue tax avoiders, but even they will be prepped by AI data.

Automation is an efficient way to process huge volumes of data in double quick time. And the days of human involvement in that process are probably numbered.

Younger generations who are stepping into the world of work would be wise to consider how AI is likely to impact their chosen occupation. In the future, complexity may be the realm that quantum computers monopolise. Their inventors may need to sit back and witness the effects of their self-learning progenitors, and perhaps with some trepidation.

What you can and cannot patent

Posted on 12th June 2023 by Solutions Accountancy

The GOV.UK website offers the following guidance if you are considering a patent application.

A UK patent may help if you want to take legal action against someone who uses your invention without your permission. For example, if they sell or manufacture your product in the UK.

A patent lasts 5 years. If you want it to stay in force after that, you must renew it every year, up to a maximum of 20 years.

What you can patent

Your invention must be:

new – it must not have been made publicly available anywhere in the world, for example it must not be described in a publication
inventive – for example, it cannot be an obvious change to something that already exists
either something that can be made and used, a technical process, or a method of doing something

What you cannot patent

Things you cannot patent include:

literary, dramatic, musical or artistic works
a way of doing business, playing a game or thinking
a method of medical treatment or diagnosis
a discovery, scientific theory or mathematical method
the way information is presented
‘essentially biological’ processes like cross-breeding animals or varieties of plants
software that has a ‘non-technical’ purpose

Only software with a technical purpose can be granted a patent. For example, software to control a driverless car could have a patent, while a chess playing app could not. If your invention is software, you may need professional advice whether it can be patented (for example, by consulting with a patent attorney).

HMRC tax credits scam warning

Posted on 8th June 2023 by Solutions Accountancy

Fraudsters often try to take advantage of the 31 July deadline for submitting tax credits renewal information.

The fraudulent emails, texts or calls claim to be from HMRC and often promise money back in the form of a tax rebate together with a click-through link to a replica of the HMRC website. The fraudsters then try and steal personal details such as bank or credit card details of unwitting recipients who in some cases even transfer money for a bogus overpayment.

As the deadline approaches, HMRC is warning around 1.5 million tax credits customers to be alerted to scams that mimic government communications to make them appear genuine. In the 12 months to 30 April 2023, HMRC responded to more than 170,234 referrals of suspicious contact from the public. More than 68,437 of these offered bogus tax rebates.

Typical scam examples include:

emails or texts claiming an individual’s details aren’t up to date and that they risk losing out on payments that are due to them;
emails or texts claiming that a direct debit payment hasn’t ‘gone through’;
phone calls threatening arrest if people don’t immediately pay fake tax owed;
claims that the victim’s National Insurance number has been used in fraud; and
emails or texts offering spurious tax rebates or bogus grants or support.

HMRC’s Director General for Customer Services, said:

‘Tax scams come in many forms and we’re urging customers to be alert to the tactics used by fraudsters and never to let yourselves be rushed. If someone contacts you saying they’re from HMRC and asks you to give personal information or urgently transfer money, be on your guard. Search ‘HMRC scams’ advice on GOV.UK to find out how to report scams and help us fight these crimes.’

HMRC is currently sending the annual tax credit renewal packs and expects all packs to be with recipients by the 15 June 2023. Universal Credit is expected to fully replace tax credits, and other legacy benefits (including Income-Related Employment and Support Allowance, Income-Based Jobseeker’s Allowance) by the end of 2024.